Turmoil in Tata-Fiat JV?

We all are aware of that the Tata-Fiat JV has received constant flak from the customers. But now even the top management is criticizing the working of the partnership. Bloomberg reported that Carl-Peter Forster, CEO and managing director of Tata Motors Ltd made a comment that he is “not happy” with the rate of Fiat sales and is considering ways to restructure the partnership.

This statement has sent chills down the spine of Rajeev Kapoor, president and CEO, Fiat India who confounded -

I have no idea why this comment was made by Forster and in what context. We are also trying to get in touch with him and understand what restructuring he meant. As of now I am clueless

Following this incident spokesperson of Tata Motors said Forster was misquoted by Bloomberg and that the joint venture is progressing as per plan.

This is not the first time Tata Motors has raised concerns about the progress. During the first quarter results also the company said that it was not satisfied with the way the partnership had progressed, but was confident of turning it around.

The JV has been struggling financially since a long time and both the partners are constantly pumping fresh funds to keep it alive. Now, there are also rumors circulating that Fiat wants to establish its own sales network and wants to part ways with the Tatas.

Do you think that Fiat should part ways with the Tatas and establish its own network? How will Fiat be able to make a smooth shift to independent outlets? Will Tata Motors be open to the idea of Fiat building its network while cars continue to be serviced and sold at Tata outlets?

Source - DNA India